Bersin, Deloitte's talent management research wing, found that companies with effective employee recognition programs have 31% lower voluntary turnover.1 When employees aren’t challenged, empowered, and recognized by their managers and peers, chances are high that their productivity will plummet and commitment to the company will weaken.
But many attempts to improve employee recognition end up wasting money––they fail to boost employee engagement and lead to higher turnover. Rather than waste money on gift cards and other forms of impersonal material incentive, companies should create working environments in which employees and managers alike receive constant and specific feedback.
Why your business needs to master the art of employee recognition
Frequently and effectively recognizing employees for their hard work adds value to your business.
Many companies have adopted effective employee recognition practices to improve their performance management systems. Following a practice of employee recognition will improve your workplace in a number of ways.
Retain top talent
Well-appreciated employees are happy and productive employees. But that doesn’t mean you have to spend thousands on over-the-top rewards programs and bonus structures. A simple “good work” can go a long way towards boosting engagement, which in turn improves retention. A recent Gallup survey found that when offered a 20% raise at another company, only 37% of engaged employees would consider leaving, whereas 54% of unengaged employees would.2
Engage your workforce
Empowerment, professional development, and self-direction drive employee performance more than anything else. When you have systems in place to recognize a job well done, you increase your employees’ desire to improve. An engaged employee will commit to company goals and influence the rest of the company with their work ethic.
Improve your business
People are your core asset, and recognizing their hard work will pay major dividends. A paper from the Center for American Progress found that replacing a highly skilled employee can cost a company more than twice as much as one year's compensation.3 And if employees aren't properly recognized, they'll likely leave for a company where they feel more valued. People are your core asset, and recognizing their hard work will pay major dividends. If you give your employees a reason to stay, they will drive the growth of your business.
Create a more productive workplace
Frequent and sincere employee recognition makes for a happier and more productive workforce. A study by Socialcast found that 78% of employees see recognition as a major source of motivation. What's more, 69% said they would work harder if they felt that their efforts were better acknowledged.4 Whether it’s a thank-you note or a paid-for company outing, simple forms of employee recognition go a long way.